How Does China’s Higher Education Expansion Policy Affect Income Inequality? An Empirical Test

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Abstract

This study uses panel data from 29 Chinese provinces (2000-2023) and the Difference-in-Differences (DID) method to identify the causal effects of the higher education expansion policy on income inequality. By dividing provinces into experimental and control groups based on differential policy impacts and controlling for two-way fixed effects, the study finds that the higher education expansion policy has significantly increased income inequality. This effect has strengthened over time. Heterogeneity analysis shows that the impact is particularly pronounced in the eastern regions and areas with a concentration of higher education resources, where the Gini coefficient increases by 0.8-1.2 percentage points annually. The findings suggest that the policy’s effect on income inequality is stronger in regions with greater educational resources and urbanization.

Authors

• Tianyi Sun, East China Normal University

• Chunshun Yan, East China Normal University